**AU Small Finance Bank Reports 16% Profit Growth in Q1 FY26**
AU Small Finance Bank has released its earnings report for the first quarter (Q1) ending June 30, 2025, revealing a robust performance for the fiscal year 2026. The Jaipur-based bank reported a net profit of ₹581 crore, marking a 16% increase from ₹503 crore during the same period last year.
In terms of total income, the bank achieved ₹5,189 crore in the June 2025 quarter, a significant rise from ₹4,278 crore in the previous year. The net interest income (NII) also saw a notable increase, reaching ₹2,045 crore compared to ₹1,921 crore a year earlier. Interest earned by the bank surged to ₹4,378 crore, up from ₹3,769 crore in the June quarter of FY25.
Operating profit for AU Small Finance Bank jumped to ₹1,312 crore in Q1 FY26, a substantial increase from ₹952 crore in the same quarter of the previous fiscal year. Sanjay Agarwal, Managing Director and CEO of AU Small Finance Bank, commented on the results, stating, “We have reported another set of consistent performance in a seasonally soft quarter, showing sustainable growth in deposits, assets, and profitability.” He emphasized the bank’s readiness to navigate near-term uncertainties while remaining committed to its long-term vision of becoming a sustainable financial institution.
**Asset Quality and Non-Performing Assets (NPAs)**
Despite the positive financial results, the bank’s asset quality showed signs of deterioration. Gross non-performing assets (NPAs) increased to 2.47% of gross advances at the end of the June quarter, up from 1.78% a year ago. The gross loan portfolio (GLP) grew by 18%, reaching ₹117,624 crore in Q1 FY25, compared to ₹99,792 crore last year. Net NPAs also rose to 0.88%, up from 0.63% in the same period last year. Consequently, provisions and contingencies nearly doubled to ₹533 crore in the first quarter, compared to ₹283 crore a year ago. The provision coverage ratio (PCR) stood at 83% at the end of June 2025.
In summary, AU Small Finance Bank’s Q1 FY26 results reflect a strong performance in profitability and income, despite challenges in asset quality. The bank’s strategic focus on sustainable growth positions it well for future opportunities in the evolving economic landscape.
**FAQ**
**What were the key financial highlights for AU Small Finance Bank in Q1 FY26?**
AU Small Finance Bank reported a 16% increase in net profit to ₹581 crore, total income of ₹5,189 crore, and a rise in net interest income to ₹2,045 crore for Q1 FY26.